VAT stands for Value Added tax, and the companies that have registered for VAT with HMRC are liable to pay VAT. The condition to register for VAT is based on threshold set by the HMRC. If your taxable income exceeds £85,000 in thirty days period, then it is compulsory for you to register for VAT. You can also register voluntarily if you are sure that your income in the next 30 days period will exceed £85,000. The VAT return can be based on monthly, quarterly, or annual schedule. VAT includes the input which is the sales and output which is expenditure. The comparison of input and output value is the VAT that is payable.